Grieg Seafood ASA Q4 2020 results – Disrupted markets with low spot prices impacted earnings - Seite 2
Farming cost during the period (total cost related to fish harvested this quarter) increased compared to the same quarter last year, primarily due to biological challenges in Finnmark and to some extent by decreased survival in Rogaland. On top of a challenging salmon market in Norway, Finnmark has been negatively impacted by quality downgrades related ISA, and superior for the quarter ended at 77%. BC experienced a strong recovery from the challenges with harmful algae blooms (HAB) in prior quarters. However, farming cost in the fourth quarter carry high costs from previous HAB incidents.
The Group’s EBIT before fair value adjustment of biological assets was negative by NOK 17 million during the quarter, corresponding to a negative EBIT per kg of NOK 0.8.
Commenting on the Group’s performance, CEO Andreas Kvame, said:
“As expected, the last quarter of 2020 was also characterized by the Covid-19 pandemic. Lockdowns in Europe, shifting demand from hotels and restaurants to retail, impacted salmon prices significantly.
Operational results improved and stabilized during the fourth quarter, with good biological performance in Rogaland and BC. In Finnmark, production was stable, but results were impacted by continued harvest of fish affected by ISA during Q3.
Overall, 2020 has been a challenging year. We did not deliver on our ambitions, not only because of Covid-19 but also due to biological challenges in several regions. We have taken important steps to remedy the situation. We have strengthened our operational capabilities with a new and more farming oriented organizational set-up, and with a potential sale of our Shetland operations, we are narrowing our focus to Norway and Canada as strong production regions. We have also started our journey to take a stronger market position with a new and integrated sales and marketing organization.
As we are starting to see the light in the end of the tunnel and a post-Covid-19 world, Grieg Seafood continue the journey of improvement, with the aim of creating long-term value for all our stakeholders.”
The Group aim to provide shareholders with a competitive return on invested capital through payment of dividends and share price increases. The Company´s long-term dividend strategy states that the average dividend should correspond to 30%-40% of profit after tax, before fair value adjustment of biological assets. Dividends are evaluated twice a year. Due to the increased volatility and uncertainty caused by the Covid-19 situation, combined with an extensive investment plan, the Board has decided to postpone the ordinary dividend for 2020.